Tate & Lyle Adjusted Pre-Tax Profits Down 2%
Tate & Lyle also announced that a breakthrough in sucralose yields has enabled cost economies through the mothballing of their US plant, giving rise to an exceptional charge of £97 million in the 2009 financial year.
29/05/09 Tate & Lyle has reported that adjusted profit before tax was down 2% at £247 million (18% in constant currency). Adjusted operating profit from core value added food ingredients was up 20% (3% in constant currency) to £107 million.
Iain Ferguson, Chief Executive, said: “Overall, Tate & Lyle delivered a sound set of results underpinned by continuing growth from core value added food ingredients. Market conditions over the past few months have proved challenging, but our focus on the food and beverage sector, which comprises over 70% of our total sales, gives us a measure of resilience, although not immunity, to the economic downturn. In times like these, the actions we must take to sustain the health of our business are clear. We are optimising cash flow and actively managing our cost base, while maintaining a keen focus on serving our customers. We are making good progress in the delivery of these priorities.”
Tate & Lyle claimed that although the new financial year has started in line with expectations, the continuing global recession, and its uncertain impact on customer demand, makes it difficult to predict with confidence the outlook for the year ending 31 March 2010.
“In the near-term, the actual level of customer demand and net corn costs will be key factors in determining our performance. Following de-stocking at the end of the 2008 calendar year, order levels from food and beverage customers appear to have stabilised, although at lower levels than the prior year. Demand for industrial starches remains weak,” the company reported in a statement.
“In the second half of the 2010 financial year, our performance will also be influenced by pricing in the EU sugar operations following the final institutional price reduction on 1 October 2009 and we expect that this should generate improved margins. Of likely greater influence will be the timing of the recovery in ethanol margins and the outcome of the 2010 calendar year US sweetener pricing round,” the statement predicted.
Tate & Lyle also announced that a breakthrough in sucralose yields has enabled cost economies through the mothballing of their US plant, giving rise to an exceptional charge of £97 million in the 2009 financial year. Production of sucralose at the US plant in McIntosh, Alabama – whose capacity had in recent years been more than doubled – will be halted to centralise manufacturing at a newer factory in Singapore.
